The First Mistake Executives Make When Leading Transformation

The pressure to have an answer

An executive entering a business that needs to change is rarely short of opinions. The board has a view. The leadership team has a view. Employees can describe what frustrates them, and the performance reports make it clear that something needs attention. The expectation is that the new leader will quickly connect those observations to a plan.

That expectation can create the first serious mistake. We start treating what we can see as proof that we understand what is happening. A missed forecast becomes a forecasting problem. Poor conversion becomes a sales problem. Customer complaints become a service problem. Those labels describe where the business feels pain. They do not necessarily explain what is producing it.

My starting point is a different question: What system is producing all of these symptoms? It forces me to look beyond the most visible person, department, or metric. It also leaves open the possibility that several apparently unrelated problems share the same underlying constraint.

Understand how the business actually works

At Zillow, my responsibilities spanned a large sales and service organization. That kind of scope makes the distinction between the formal operating model and the actual one consequential. The organization chart shows who reports to whom. It does not show whose approval employees really need, which handoffs create delays, or how work moves when the official process becomes impractical.

I want to understand both versions. The formal model tells me what leadership intended. The actual model tells me what employees have learned is necessary to get through the day. The distance between the two can reveal unclear authority, competing expectations, missing capabilities, or a process that depends on people quietly compensating for its weaknesses.

That is why I cannot diagnose a business from executive presentations alone. I need to follow work across functions, listen to the people doing it, and understand the customer experience at the points where responsibility changes hands. A process that looks efficient inside one department can impose substantial cost on the next one.

Economics belong in that same investigation. I want to know where revenue becomes profit, where complexity absorbs capacity, and what the business has to do to fulfill the promises it makes. Improving activity without understanding those relationships can produce more of the wrong work.

Treat the first explanation as a hypothesis

The first persuasive explanation deserves examination, not immediate adoption. A leader may be right about the constraint in their function and still miss how another part of the business contributes to it. A frontline employee may describe a workaround accurately without seeing why the original requirement exists. Data may establish that performance changed without explaining why.

I look for agreement across evidence that comes from different places. Do the financial results support the operating story? Does the customer experience match the internal scorecard? Do employees describe the same process that managers believe they are running? When those accounts conflict, the conflict is useful information.

I also want to understand incentives before concluding that people lack commitment. What is measured? What is rewarded? What creates trouble for an employee? If the behavior makes sense under the current system, asking for a different attitude will not be enough. Leadership may need to change the conditions that make the unwanted behavior rational.

The discipline is to move from an observation to a hypothesis, then look for evidence that could confirm or challenge it. A diagnosis becomes stronger when it can explain the pattern, including the facts that initially seemed inconvenient. It becomes weaker when it depends on dismissing every contradictory account.

Diagnosis needs a finish line

None of this is an argument for an endless listening tour. Employees can tell when a leader is learning and when a leader is postponing a decision. Understanding earns credibility only if it eventually produces a useful point of view and a willingness to act on it.

I separate decisions by the strength of the evidence and the consequences of being wrong. Some problems need immediate action. Some can be tested in a limited setting before a wider commitment. Others require more observation because the decision would be difficult to reverse or would consume substantial trust. Giving every decision the same waiting period makes little operating sense.

A useful test has a question, an owner, an observable outcome, and a date when leadership will decide what comes next. Without those boundaries, testing becomes another form of indecision. Equally, an irreversible decision should not be rushed simply because the executive feels pressure to demonstrate momentum.

There is a cost to changing the wrong thing. Beyond the money and disruption, an early mistake can teach the organization that leadership is more interested in appearing decisive than understanding the work. Recovering that confidence can take longer than the intervention itself.

Arrive at a view that people can examine

The output of diagnosis should be an explanation clear enough to challenge. What is the constraint? What evidence supports that conclusion? What will change because of it? What will remain stable? What would make us revise our view? People do not need to agree with every conclusion to understand the logic behind the decision.

For me, that is where listening turns into leadership. I am accountable for making the call, including when the evidence remains imperfect. I should be able to explain why the proposed intervention addresses the system producing the problem, rather than merely responding to the loudest symptom.

Transformation begins with that obligation. Learn enough to distinguish a plausible story from a defensible diagnosis. Then make a decision, establish how the organization will learn from it, and accept responsibility for what follows.